“What many people do not realize, is that perfectly healthy people can use a power of attorney document to give others the legal authority to take care of their financial matters, so they can do other things.”
A financial power of attorney instrument is a little like an adult version of a Christmas wish list. Unlike a child’s list of toys, however, when done correctly, a financial power of attorney is a way to make your wishes come true, within limits. Here are surprising things you can control with your financial power of attorney document.
Arrange for Someone Else to Handle Things You Do Not Feel Like Doing, Even Though You Could
Many people think of a power of attorney document as something you set up if something life-changing happens, such as, you are in a catastrophic car accident and cannot manage your own finances for a while. What many people do not realize, is that healthy people can use a power of attorney document to give others the authority to take care of their financial matters, so they can do other things.
Let’s say you found your dream house, but the sellers insist on a closing date right during your vacation. Before you cancel your cruise, have your lawyer write a limited power of attorney and designate someone to attend the real estate closing and sign the documents on your behalf. Just trust the person, and that you bring them back a souvenir.
You can also get a financial power of attorney for more than one transaction. For example, you signed on to serve for two years as a 50+ volunteer with the Peace Corps. You can name someone to collect your income, pay your bills, open your mail and manage your investments, while you are overseas. You can authorize the person to sign contracts, rent out your house while you are away, handle insurance issues and move money around in your bank accounts, if you are in a remote location with no reliable internet for online banking.
Durable Power of Attorney
The most common reason for people to set up a durable financial power of attorney, is if they are incapable of managing their money matters one day, due to an illness like Alzheimer’s disease, or a debilitating injury. The person named to take actions (the agent) on behalf of the incapacitated person (the principal) seldom reads the fine print in the document. The designated agent (usually a close relative) takes a copy to the bank and the nursing home to show they have the authority to pay the person’s bills.
What the agent might not know is that (depending on the wording in the power of attorney instrument) she can also collect debts on behalf of the principal, and apply for public benefits for him, like veterans benefits and Medicaid. She can file his taxes, manage his property, buy or sell stocks and bonds and run his business, according to his instructions.
She can buy and sell real property, personal property, digital property and intellectual property. If the document authorizes it, she can use the principal’s assets to help maintain his family and other persons with gifts he had customarily made to individuals and charitable organizations. She can even designate someone to serve as the agent in her place.
To make sure that your power of attorney instrument is set up to control as many things as you want, talk with an elder law attorney in your area. The regulations are different in every state, and this article is about the general law.
Aging Care. “Things You Can and Can’t Do with Power of Attorney.” (accessed August 15, 2018) https://www.agingcare.com/articles/things-you-can-and-cant-do-with-poa-152673.htm
American Bar Association. “ Pick the Right Power of Attorney Instrument.” (accessed August 15, 2018) https://www.americanbar.org/publications/voice_of_experience/2017/march-2017/pick-the-right-power-of-attorney-instrument.html